WHAT IS INCLUDED IN MY PEO QUOTE?

Every employer is required to withhold social security insurance taxes from the employee. It is also your responsibility as the employer to match this amount, representing the employer’s contribution. FICA (Social Security) contributions are invoiced (to you) at 6.20%* of the employee’s compensation, up to a maximum of $176,100 in gross earnings per employee (2025). Your company’s contribution will only be the actual amount the employer is required to pay under FICA rules. During the payroll process, this amount will be charged to your company and remitted to the federal government by dmDickasonHR on your behalf.
* All employers pay 6.2% whether they use a PEO or not.

Medicare is a portion of FICA and is also an employer “pass-through” cost. This tax is invoiced by dmDickason when payroll is processed at 1.45%* of the employee’s gross earnings. Medicare does not have a taxable wage base maximum, and the tax amount is charged on the employee’s gross pay. Medicare will be collected from you, the employer, and remitted to the federal government by dmDickason.
* All employers pay a 1.45 rate, whether they use a PEO or not.

Federal Unemployment Tax (FUTA).

The State Unemployment Tax Act, (SUTA), requires employers to pay a payroll tax based on your claims activity that goes directly into your state’s unemployment fund. This tax is only paid by employers, NOT employees.
SUTA is state mandated tax that employers are required to pay to help fund unemployment benefits for displaced workers. The purpose of SUTA is to provide temporary financial relief to those that have lost their jobs and are actively seeking new employment.
2025 tax amounts are calculated as a percentage of the employee’s gross earnings (wages/salary) paid to each employee and the percentage is based primarily on your company’s unemployment claims history. New employers in Texas begin with a tax rate set by the Texas Unemployment Compensation Act (TUCA) and is the greater of the average rate for all employers in the NAICS code to which they belong; or 2.7%, whichever is higher. The new employer tax rate is assessed until a new business has developed its own unemployment claims experience rating over several reporting quarters. Future SUTA rates ultimately represent actual unemployment claims filed against your company and can be lower, or as high as 6.25% for employers who experience uncontrollable turnover.

In a PEO / co-employment relationship, your SUTA tax is calculated and paid to your state by dmDickason based on dmDickason’s tax rate. Not only does this alleviate employers from the time-consuming and complex task of calculating and reporting SUTA (as well as fines and penalties by your state, if applicable), using dmDickason’s state unemployment rate can save you money!
How? In a PEO relationship, dmDickason is technically your SUTA co-employer of record, (representing your company with your state). For most new PEO clients, it is a significant financial benefit to be able to legally utilize dmDickason’s SUTA rate. Since our unemployment claims administrators challenge numerous claims every day, we know what we are doing! And, because we win the majority of claims we process for our Clients, our state unemployment rate is almost always lower than yours!
Just like the tax obligations above, dmDickason is authorized and responsible for invoicing, collecting, paying and reporting your contributions to the government quarterly on dmDickason’s Form 941.
It’s simple! Use our lower SUTA rate, we do the work, and you save money!
* (By using dmDickason’s state unemployment rate, many of our clients save significant savings from the unemployment taxes they are currently paying under their own state unemployment rate. In turn, these savings help off-set much of the management fees all PEOs charge for their services. In a similar way, we can normally save our clients even more money in reduced workers’ compensation insurance costs by using our WC experience rate and policy, as well! (See below).

Replacing your high claims rates with dmDickason’s lower rates X
charged by the government for FICA-Social Security, FICA-Medicare and FUTA are the same for every company. All employers are required to pay the same tax rate on behalf of the employee, regardless of whether you use dmDickason, another PEO or ASO, or handle these responsibilities in-house.
In addition to your company’s claims made, SUTA Rates are determined by the State’s (1) General tax rate, (2) Replenishment tax rate, (3) State’s unemployment obligation rate, (4) State’s deficit tax rate, (5) Employment & training/Bond Obligation investment account and (6) the State’s interest Tax rate. Since most companies have very different degrees of employee turnover and claims made by their employees, this rate is going to fluctuate from employer to employer. All rates are not the same, especially for employers that have moderate to high turnover and do not effectively manage their claims.
We do this for a living: Through a written co-employment relationship with a PEO, the government authorizes our new PEO clients to assume the PEO’s unemployment rate when beneficial to the employer. (This is not allowed in an ASO (a lar carte services) where a co-employment agreement does not exist). However, with most potential new PEO clients, dmDickason’s rate will almost always be lower than the state rates charged to your company. So, when there are cost saving to your company (by switching from your company’s high rate and joining our PEO) the savings essentially reduces the effective administrative and management fee that a PEO will charge for its services.
The same applies with Workers’ Compensation costs: Similar cost savings can often apply when we compare the Workers’ Compensation rates charged by your carrier against the rates that dmDickason can offer. Again, as your co-employer, your state government will authorize our PEO Clients to assume the PEO’s workers’ compensation rates and modifiers. And, as a professional HR company, our rate is (almost always) going to be less than your current rate.
A Win-Win: So, again, from our specialized work in reducing Client claims exposure in unemployment and workers’ compensation, and, because of our larger-than-normal economy of scale, dmDickason knows what it takes to earn some of the lowest rates possible. And, by your company being legally able to use dmDickason’s rate, this cost savings (as well as the rate cost saving above) should significantly help off-set the PEO’s standard administrative and management (effective) fees for its services.
Call us today for our free, no-obligation request for proposal at (915) 532-1981.

Every state in the USA (except Wyoming and Texas) requires all employers to maintain Workers’ Compensation insurance for their employees. This insurance coverage is a cost to the employer, and it is illegal to charge employees for this coverage.
dmDickason’s PEO quote will include Workers’ Compensation Insurance for all employees, (excluding 1099 and temp employees). Our quote will reflect workers’ compensation rates based on class codes and the risk associated with actual type of work being performed by each employees. Coverage (rates) for high-risk work, such as construction, is obviously more expensive than coverage for office workers since construction workers suffer more accidents and injury.
dmDickason’s quote will reflect different rates for each workers’ compensation code based on a standardized list published by NCCI that specifically describes the type of work associated within each class code. Workers’ compensation insurance premiums are based on an amount per $100 of payroll earned by each employee. For a simplified cost example, please note main chart. A 1.49 rate will be charged for each $100 of gross payroll paid to each employee in the same class code. The rate might be lower or higher for employees in different risk categories.
As you may expect, workers’ compensation rates can dramatically climb based on a specific employer’s claims history, which is generally calculated by both the severity and frequency of claims paid over the previous 3-year company history.
One of the advantages of working with dmDickason is that workers’ compensation costs are “pay-as-you-go” and the total estimated annualized premium for your company will not require a 20-30% deposit to initiate coverage. No deposit is required with dmDickason.
Please Note: Information about your company’s claims history (Loss Runs) will be required by the Underwriters of our Workers’ Compensation insurance policy. If you have a traditional statutory workers’ compensation policy in place, the policy’s declaration page (DEC page) will identify your current annual costs.

Subtotal of payroll taxes and costs INCLUDING FICA, FUTA, SUTA and Workers’ Compensation. In this example, these costs represent 12.44 % of gross compensation. In this example, dmDickason would be required to mark-up this payroll by 12.44% just to cover routine costs that your company would normally have to pay with or without dmDickason.

In a co-employment relationship, dmDickasonHR PEO will act as the administrative employer (employer of record) and the client acts as the worksite employer (employer of fact). The employer maintains control of the business and is in charge of all business decision-making including financial decisions, production, employee supervision and staffing decisions. dmDickasonHR handles the time-consuming administrative tasks normally associated with the back office /employment relationship.

In a co-employment relationship, dmDickasonHR PEO will act as the administrative employer (employer of record) and the client acts as the worksite employer (employer of fact). The employer maintains control of the business and is in charge of all business decision-making including financial decisions, production, employee supervision and staffing decisions. dmDickasonHR handles the time-consuming administrative tasks normally associated with the back office /employment relationship.